Australian Pension Giant Boosts Infrastructure Investing Team

  • CBUS wants 3 more staff for direct infrastructure investing
  • Fund aims to have 30% of infrastructure invested directly

Construction & Building Unions Superannuation, a A$43 billion ($34 billion) Australian pension fund, is boosting a team to make direct infrastructure investments as it seeks to bring more of its asset management in-house.

CBUS is seeking to bolster its team of five by hiring another three people this year as the fund aims to have 30 percent of its infrastructure portfolio invested directly, head of infrastructure Diana Callebaut said in an interview. While the Melbourne-based fund had invested in external infrastructure managers, over the past 18 months it has started bulking up its own teams.

“We feel that it is an area of material benefit having internal capabilities,” Callebaut said in Sydney Wednesday. “Once we move into the asset management phase, we will look at that and see if we need a few more individuals.”

The hiring plans are part of an accelerating trend to in-house investing across Australia’s giant pension funds as executives look to boost member returns and cut costs in a low-yield world. The country’s largest fund, the A$130 billion AustralianSuper Pty., last year said it ultimately expects to manage half of its assets itself.

The internal CBUS team will assess direct infrastructure investment opportunities in Australia and overseas, as well as manage the relationship with external fund managers to drive a better deal for members, Callebaut said. The fund, which formed in 1984, was a co-investor alongside IFM Investors Pty in the A$5.1 billion acquisition of two seaports in New South Wales state in 2013.

“In the Australian market we very much feel that where we have a value proposition is in the greenfield space,” Callebaut said. “In the brownfield space or secondary market we are a bit more agnostic whether it is Australia or the OECD.”

CBUS allocates 11 percent, or about A$4 billion, of its A$43 billion portfolio to infrastructure, she said. The fund, which primarily manages the pension savings of construction and building workers, expects to hold more than A$60 billion in assets within the next five years, according to its annual report. Its flagship fund returned 11.85 percent last year.

    Before it's here, it's on the Bloomberg Terminal.